My friend has an iPhone 4S and I'm not sure of the software version. The problem is the microphone icon is missing from the keyboard and I don't know why. I was showing her my iPhone 4 and the ability to speak and have it transcribed into text but her phone doesn't have the microphone icon on it. Why is that? How can she turn it on?
Are you sure your friends phone is a 4S and not a 4?
This will help you confirm what model it is. http://support.apple.com/kb/ht3939
Does it have Siri? If not it is probably a 4. If it does you need to update the OS to the current 7.X. I don't remember if 6 or earlier had the built in ability to transcribe voice to text.